1. Choice of courier and low courier fee

Most of Pinduoduo's deliveries are to third- and fourth-tier cities, that is, most of them are in remote rural mountainous areas, so they are basically delivered by postal courier. Postal courier is slow, but there are many stations and the price is cheap. And the courier fee is usually less than 3 yuan per order when the daily sales volume is large.

The second is that Pinduoduo merchants adopt such a strategy: assuming that the product is fresh lychees, Taobao sells one catty for 19.9, and sometimes it starts at three catties. In fact, it is not the fruit that is expensive, but the price of SF Express's cold chain. Even if there are thousands of orders per day, Pinduoduo still uses ordinary express delivery for most of the fruit delivery. The reason is that if the nearby areas are delivered one day later, they will not go bad; if the goods in the farther areas go bad after arrival, they can be compensated according to the share.

Thinking from the buyer's perspective, if Pinduoduo's 5 catties of lychees are 9.9 free shipping, and Taobao's 1 catty of lychees are 9.9 free shipping, most people will definitely choose the former.

No matter how bad the 5 catties of lychees are when they arrive, at least 3 catties are good.

Some people wonder, there are also Taobao merchants with low prices and high sales, is there any difference? The difference is that Taobao is already very mature, and the tone has basically been determined. Customers are used to the fact that things they buy today should be delivered tomorrow. But once customers choose to place orders on Pinduoduo, they care more about price and cost-effectiveness rather than express delivery speed.

2. Inventory goods and reprocessing at the source factory

Take clothing factories as an example. There are always some unsalable inventories in factories, including inventory of sizes. It is impossible to sell all sizes of clothes at the same time. Even if they are sold, there must be stock in stock. These inventories cannot be sold later. For example, summer clothes can still be sold in autumn, but they cannot be sold in winter and spring. But the goods in the warehouse are stored there, and there are gaps in warehouse management fees, land occupation fees, management fees, and even your working capital.

Many people will think, what about selling next year? But now every time a new style is launched, paid promotion is required. It is a loss to promote an outdated summer dress. Similarly, a customer who buys one at a time will obviously not choose last year's unsalable model.

Therefore, a lot of inventory goods are either given away or sold at a price lower than the cost price. For example, some real leather jackets may be sold at 99 yuan with free shipping on Pinduoduo, which is lower than the cost of the clothes themselves.

So why doesn't Taobao sell at a low price?

Two reasons:

First, Taobao has thousands of people with thousands of faces, and selling low-priced goods will affect the store's own label. Secondly, Taobao's traffic is too expensive now, and Pinduoduo will have traffic as long as it is cheap.

Second, direct sales from the source factory. For example, there are many napkin brands in our lives, such as Xin Xiangyin. In fact, the production costs of these brands' OEM manufacturers are very low, because they are sold at a high price because of the brand. Of course, this is normal, after all, building brands, advertising, etc. are also expenses.

And when the source manufacturers of these brands start selling them themselves, the prices will be cheaper. Unfortunately, it doesn't work on Taobao because there is a low-price blocking strategy. If you go to Taobao to buy something, Taobao will try to let users see something for 99 yuan, not 9.9.

But Pinduoduo started with low prices, so the cheaper it is, the greater the advantage. Those source manufacturers even tried to reprocess the thickness and size of napkins, which became an incredible price of 9.9 yuan/6 rolls.

3. Paid pit positions become loss-making activity positions

For example, if a merchant wants to buy a promotion position on Taobao, it may cost 5,000 yuan, and my product will appear on this promotion position for 1 hour. As for how much the transaction is, it depends on the product itself and other operational capabilities such as vision.

Pinduoduo's paid promotion positions are more loss-making activity positions. For example, a product is usually sold for 9.9 with free shipping, the actual cost is 3 yuan, the express fee is 2 yuan, and the profit from selling one is about 4 yuan. On average, multiple orders may make more than 5 yuan.

Then after the loss-making activity position, the first 1,000 orders will be free of shipping for 1 yuan, and the next 500 orders will be free of shipping for 3 yuan. After that, the sales will resume at 9.9 yuan, and one resource position will be displayed for one hour.

Let's do some calculations. Assuming that the first 1,000 orders lose 4,000 yuan, and the next 500 orders lose 1,500 yuan, but the actual loss is not that much, because there may be multiple orders by the way, and the sales evaluation is also weighted on the product, which is equivalent to spending 5,000 yuan to buy a display position.

Taobao's way is that the merchant directly pays 5,000 to display you, and Pinduoduo loses 5,000 to display you.

The former has to maintain high prices, and the display of thousands of people and thousands of faces blocks the low-price display. In everyone's eyes, Pinduoduo has all prices, including 1 yuan free shipping, for this reason.

So is Pinduoduo just cheap and low prices? Not really.

Low prices are natural, and low prices mean sales. There are constant activities, and even though they are losing money, you actually have an account in your mind, just think of it as spending money to buy a slot on Taobao.

Therefore, most Pinduoduo merchants do this. Every day, the docking group is constantly reviewing various activities, constantly signing up for activities, and killing loss-making activity slots in seconds.

This is a way to sell goods at a low price. Once you are familiar with a few activities, you can do the math in your mind. As long as you don’t lose money, the natural traffic will make you money.

But if there is no limit on the price bottom line, it will mean that whoever has a good supply chain and whoever can keep costs low will have more advantages. After all, Pinduoduo’s traffic will not be provided for free for no reason. Therefore, it is easy to lead to the phenomenon of low prices and large volumes, and you don’t make much money on each order, and the money you make is getting less and less.